|
CHINA ORDERS PRIVATE OIL DRILLERS TO
HALT DESERT OPERATIONS PAGE {1}
2005/11/7
By Peter S. Goodman KUCHE, China, The Washington Post
Into the red earth of the Gobi Desert, Ma Changchun
sank all the money he had scraped together in his 45
years. He added the life savings of nearly 300 friends,
relatives and neighbors from his village, most of them
poor farmers who knew little about business.
Together, they invested in an oil venture on a remote
expanse of China's northwestern frontier, tapping
wells abandoned more than a decade ago by the
country's largest energy company, China National
Petroleum Corp. They bet there was enough oil left
there to lift them to new lives.
What they did not bet on was that CNPC, an enormous
firm controlled by the Communist Party government,
would complain that such private ventures in Xinjiang
province threatened its hold on other assets. Last
month, central government officials ordered the
private drillers to cease operations. Now, Ma and some
500 other wildcatters are in limbo, clinging to their
encampments on the parched soil of the Yiqikelike oil
field.
"I'm under enormous pressure," said Ma, explaining how
he carries the aspirations of hundreds of villagers in
Ningxia province. "If I ever went back, they would
find me to demand where their investment is. We're
ordinary people. We don't care about these ownership
issues. But if anyone is going to take our livelihood
away, we'll fight until we die."
This battle in the high desert of Xinjiang underscores
the perils still confronting small, private investors
in modern-day China. It also highlights a conflict
between the central government -- which typically
sides with state-owned firms because they pay taxes
directly into its coffers -- and local authorities,
which have come to count on private businesses for
their own tax revenue as well as jobs.
CNPC is one of a handful of state-owned giants
nurtured with protected-monopoly status and virtually
unlimited credit. Its best-known subsidiary,
PetroChina, is listed on stock exchanges in New York
and Hong Kong. The company is crucial to China's
leaders now, as Beijing encourages energy firms to
search for new sources of oil.
Xinjiang, a semi-autonomous province more than twice
as large as Texas, has become the centerpiece of
China's energy plans, with its fields expected to
become the country's largest source of oil by 2010,
according to state estimates. Kuche -- an ancient Silk
Road town whose dreary concrete-block buildings belie
that legacy -- sits on the edge of the Tarim Basin,
which boasts half of Xinjiang's oil reserves.
But even as the area has helped power China's
industrialization, local fortunes have lagged. This
has fueled resentment among the largely Muslim Uighur
people, the ethnic minority that predominates in Kuche
and most of Xinjiang. They have seethed as the bulk of
the energy boom's benefits have been captured by
majority Han Chinese. For China's leaders, concern
about ethnic tensions has grown with the widening
income gap between the neon-lit cities of the east
coast and the poverty of the hinterlands.
In recent years, Kuche has sought to exploit its
natural wealth to create jobs. Since 2001, the local
government has courted investors that have erected new
refineries on the eastern fringes of town. For the
past two years, the Kuche government has been buying
every drop of oil extracted by the private
entrepreneurs at the abandoned CNPC site, then selling
it to these new local refiners. But CNPC and other
state energy firms have remained unwilling to sell
crude oil to local refiners lest they undercut their
own refining ventures.
Yiqikelike, the first oil field developed in Xinjiang,
was drilled in 1958 by Chinese engineers with Russian
help. It sits more than 80 miles from the county seat,
accessible only by a rough gravel road. Where the only
other local industry had been sheepherding, a
veritable city took shape -- with brick dormitories
housing some 20,000 workers who supported the drilling
rigs beneath snow-capped peaks.
For a time, the field yielded 30,000 tons of crude oil
a year. By the 1980s, however, production had slipped
and costs were climbing. In 1986, the Xinjiang
Petroleum Administration Bureau -- a state entity that
was a forerunner to CNPC -- ceased operations. Today,
the city is a ghost town, the old structures scoured
down by the elements to resemble the tan boulders that
punctuate the stark landscape.
Some oil continued to gurgle to the surface. In 1987,
the government for Akesu district, which includes
Kuche, complained to Xinjiang provincial authorities
that oil from the wells threatened local drinking
supplies. Akesu sought and gained the power to allow
villagers to collect whatever oil sprung from the
wells. With local government encouragement, peasants
with donkey carts began hauling away oil in buckets.
In 1994, Kuche gave a formal contract to a newly
private firm called Ruipuseng Co. to haul away as much
crude oil as it could, paying about US$12 to the local
government for every ton. The firm's partners put up
about US$250,000, they said in interviews. Half went
for oil-pumping equipment, and the other half went to
the local government.
|
